Philippines soft drinks industry offers alternatives to sugar tax

The Philippines soft drinks industry has ramped up its opposition to a possible sugar tax as the government sets out to increase the size of its proposed levy.

In an updated position paper on the beverage tax bill, which is currently passing through the Senate, the Beverage Industry Association of the Philippines (BIAP) offered lawmakers three alternative tax options that it says would be “less discriminatory” and more effective in tackling lifestyle diseases.

The group believes that the policy to impose a tax worth up to PHP5 (US$0.10) per litre on sugar-sweetened drinks would result in a shift towards informal beverages that are unregulated.

This, it says, would follow a drop of 33-75% soda sales volumes for the PHP170bn (US$3.3bn) industry, and harm sugar farmers who would see their incomes fall dramatically.

“The resulting drop in business volume and job losses will lead to the reduction of tax collection from corporate income, personal income, and value added tax. This will offset any expected revenue from the SSB tax,” BIAP said.

Instead, it has called on legislators to consider proposals either to base their tax on caloric sweetener content, similar to what is being done in Britain and Singapore; impose a PHP10 (US$0.20) tax per kilogram on all caloric sweeteners used in beverages; or introduce a PHP5 tax per kilogram on all caloric sweeteners used as a raw material.

“Unlike the sugar tax bill, which taxes water content more than the caloric sweetener content of a particular beverage, under a PHP10 per kilogram tax on caloric sweeteners the price increase on the products will range up to 12%, which may burden consumers less as opposed to a 40-200% increase,” BIAP said.

“Compared to the government’s proposal, the PHP5 per kilogram tax on all caloric sweeteners used as a raw material will affect all users of caloric sweeteners, thus broadening the tax base beyond just the beverage industry,” it added.

Meanwhile, the Department of Finance has been pushing to increase the originally mooted excise tax because any levy below 5% per litre “would defeat the purpose of it being a health measure”.

Finance undersecretary Karl Kendrick Chua said a single-tier tax of PHP5-10 per litre would reduce consumption of sugary sodas even further.

“The health objective is that the price should increase by 20% to have the optimal impact, so a 20% increase is PHP10 per litre,” Chua said.

More from Southeast Asia…

Cambodia enlists Malaysia to support halal strategy

Cambodia has called on Malaysia to help develop its halal industry in a bid to boost exports, drive tourism and attract investment from the Middle East.

In a meeting in Phnom Penh with Malaysia’s top religious official, Jamil Khir, Cambodian prime minister Hun Sen said his country had been taking steps to diversify its production base from traditional industries and was keen to develop its food sector.

“We want to encourage halal training for Muslim people and to encourage Islamic investors to come to Cambodia to promote halal food production for export,” Hun Sen said, adding that the country’s burgeoning relationship with Malaysia could help in its aims.

Cambodia plans to finalise draft regulations on halal food certification by the end of the year. These will be sent to Malaysia for scrutiny before they are implemented, said Sos Mousine, the Cambodian official who is steering the process.

The new rules are intended to make it easier for entrepreneurs to open halal restaurants that meet strict standards.

“Anyone, including Muslims, non-Muslims and foreigners, will be able to open a halal restaurant, as long as they follow the criteria for halal standards set by the committee,” Sos Mousine said.

“Now we have a direct flight from Dubai to Cambodia with Emirates, more tourists will come if they know they can find halal food,” he said.

The Commerce Ministry has been supporting a drive towards halal food production, its spokesman has said.

“It benefits not only local Cambodian Muslims, but also all Muslim people, especially Muslim tourists.”

Two Malaysia-based Islamic financial institutions are expected to open their first Phnom Penh branches in the next 18 months to assist Muslim businesses in Cambodia.

Baiju maker to target under-30s with Thailand launch

Joybo baiju will soon bring its bizarre marketing to Thailand, where it is planning to attract young spirits drinkers.

The distilled wine brand, known in its native China for advertising slogans such as "I drink all people under the table only to have a chance to whisper to you” and "What I want to say most is in my eyes, in my drafts, in my dreams and in the bottle”, is especially popular among social-savvy under-30s.

Its promoters have already held a series of promotional events at fashionable venues in Phuket and Chiang Mai to show off the drink. In China, baiju is traditionally seen as an expensive drink that only members of the establishment can afford.

Like single malt whiskey, this it also uses a single raw material, red glutinous sorghum cultivated in Chongqing, though it is lower in alcohol, with a creamy, light and refreshing taste.

The company said Joybo's lower abv is more "in-line with young people's drinking habits and the international trend of wine and spirits”.

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